incentis group professionals recently completed incentives negotiations for a retail project in Southern Georgia.  Our client was proposing to add 75 new jobs and retain over 100 current positions.  The company also proposed a $14.8 million investment in building, fixtures and infrastructure.  

incentis group assisted our client in securing over $1.65 Million in incentives from several discretionary State and Local sources.  The incentives package includes a $400,000 EIP Grant and a $200,000 OneGeorgia Grant to be used toward nearby public infrastructure, $245,000 in local in-kind support, and additional $800,000 in grant assistance.  The project was initially denied EIP Grant funding but incentis group was able to work with local authorities to show the project's impact and value and secure the project assistance. incentis group was also able to negotiate more favorable rates and terms for several incentives.

For more information on the benefits outlined above or similar opportunities available to your Company, please contact Rita Williams at Rita.Williams@incentisgroup.com or 513-651-6786.

The States' Economic Incentives Quandary, A Message from the CEO

As the economic downturn heightened in 2009, state governments reacted in several ways regarding the use of incentives to address the economic challenges of a recession, even as they simultaneously dealt with increasing budget constraints.   In a number of states funding for economic incentives was substantially reduced or even eliminated as part of specific budget targeting or across the board budget cuts.  Alternatively, some states either held economic program funding constant, increased funding for economic growth initiatives (coupled with supplemental funding from federal stimulus dollars), or redirected inducements toward the retention of business and jobs.  State officials have been greatly challenged to balance the need to stimulate economic development with the reality of decreasing state revenues.

The recession officially ended in June of 2009, yet business investment and more strikingly business hiring has lagged past recoveries.  Quarterly GDP growth in 2010 has averaged about 2.5% compared with typical growth in the first year following a recession of 6% or greater.  This has increased pressure on states to increase inducements for business investment and job creation and retention. 

The challenge of balancing economic stimulus with budget constraints faces a new reality regarding the states' fiscal health.  During the past two years many state budgets were supplemented with federal assistance either through direct transfers of funds via stimulus expenditures or by subsidizing state borrowing.  According to Moody's Investor Services, the states' current debt outstanding is nearly $460 billion.  The continued slow growth of states' revenues will likely increase borrowing in the coming year, as well.

The new reality is that states may need to greatly reduce support for economic development programs and incentives in the coming years.  This will be the result of the federal government's inability to sustain subsidies for state budgets and borrowings and demands by the electorate this election to reduce deficits.   This said, states can ill afford to neglect economic development.  The further reality is that states will likely target very limited economic development dollars at projects that provide the highest return in jobs and economic activity to the state economies.   Therefore, it is imperative that companies demonstrate the benefits of their projects to state and local governments; economic and fiscal, direct and indirect, short term and longer term, in order to justify the use of economic incentives.